Farmers have begun harvesting sugarcane in Hau Giang Province, the country's largest producer, but do not expect to earn high profits since prices are low.

Farmers harvest sugarcane in the southern province of Ben Tre's Chau Thanh District. The price of the product has fallen leaving farmers with little profit to show for their labours.

Sugar mills in Hau Giang offer a price of VND850 per kilogramme to sugarcane that has at least 10CCS (commercial content sugar), around VND70 less than last year.

Tran Quang Hanh of Vi Thanh city's Tan Tien Commune said with costs at around VND700 a kilogramme and average yield of 130 tonnes per hectare, farmers were likely to earn a profit of VND7-12 million (US$333-571) per hectare.

With sugarcane being a nine-month crop, this translates to around VND1 million a month.

Hau Giang farmers have planted more than 14,000ha this year, 500ha more than last season.

The Can Tho Sugar Company (Casuco) has signed contracts with farmers in Phung Hiep District to buy cane grown on 8,700 ha of the district's total 9,550ha. The Long My Phat Sugar and Alcohol Company has signed contracts for the remaining 800ha.

But farmers say when the harvest season peaks, most will sell to traders at lower price than offered by the mills because of problems with transporting the cane to the mills.

Nguyen Hai, general secretary of the Vietnam Sugarcane and Sugar Association, said farmers faced difficulties because of their small scale of production and lack of mechanisation.

In Thailand, India, and Brazil, the world's major sugarcane producers, mills pay US$24-29 a tonne, but in Vietnam they pay $47 though the quality of sugarcane is lower, he said.

Nguyen Thanh Long, chairman of the Vietnam Sugarcane and Sugar Association and general director of the Can Tho Sugar Company (Casuco), said sugarcane prices were down because sugar prices had declined.

Sugar mills had difficulty selling their products because of smuggled sugar in from Thailand, he said.

The mills now have 280,000 tonnes in stock compared to 100,000 tonnes at the same time last year, according to Long.

With the price of sugar unlikely to exceed VND14,000 a kilogramme this season — or equal to the production price -- Casuco would not increase the price of sugarcane, he said.

At the beginning of the sugarcane planting season, Casuco organised training courses for farmers and introduced new high-yield sugarcane varieties.

This year sugar mills nation-wide have agreed to begin sugar production on September 20, according to the association.